When BC NDP Leader John Horgan is formally installed as premier, his agenda for the next few weeks might look something like this:
•Fly to Washington, D.C., lobby against softwood lumber duties.
•Call BC Utilities Commission (BCUC), order fast-track review of Site C dam.
•Brainstorming session with government lawyers on stopping the Trans Mountain pipeline expansion.
And though it’s not spelled out in the four-year governance agreement that the NDP and Greens have signed, it’s likely that the Greens would support the NDP’s plan to put hydraulic fracturing under the microscope – something that could cast doubt over B.C.’s booming Montney shale gas sector.
The energy and resource sectors in B.C. can expect some significant changes under a Green-backed NDP government, because they are among the sectors that the NDP-Green alliance has targeted for immediate action.
The most pressing issue for the “GreeNDP” government will be ordering a BCUC review of Site C dam, because the project could soon reach the point of no return. It’s estimated that about half the project’s $8.8 billion budget has already been spent or committed.
Despite Horgan’s assurances that he won’t halt work on the project while the review is underway, more than 2,000 construction workers are now wondering how long they might have jobs, and First Nations that signed benefits agreements might be wondering what a half-
finished dam will mean for those agreements.
Last week, Horgan, Premier Christy Clark and BC Green Party Leader Andrew Weaver had a public debate by letter on the issue.
In response to Horgan’s letter to BC Hydro CEO Jessica McDonald to halt any forward movement, including the relocation of two homes, Clark warned Horgan that doing so would add $600 million to the project’s costs.
Chris Gardner, president of the Independent Contractors and Businesses Association, last week called Horgan’s plans for Site C “irresponsible and reckless.”
“It’s sending a signal to investors who want to invest in British Columbia to create jobs that, if you get a project approved in this province, you may not be able to build it. The government may change its mind.”
Horgan wants the BCUC review to be based solely on B.C.’s “current supply and demand” – wording that appears crafted to doom the project because it is not being built to address today’s power needs, but rather the future demand expected through population and industrial growth.
The irony is that both Green and NDP platforms are filled with talk of developing a green economy and clean energy. Should that include phasing out natural gas and encouraging more rapid adoption of electric vehicles, B.C.’s power needs will increase.
“To hear it said that we need to have more clean energy, while the person saying it is contemplating closing the biggest clean-energy project in B.C., is deeply puzzling,” said Stewart Muir, executive director of Resource Works.
While Horgan’s pledge to lobby Washington on behalf of B.C.’s forest sector will be welcome by that industry, other resource industries are worried about policies in the GreeNDP four-year agreement and other hybrid planks from the NDP and Green platforms that have yet to be spliced together.
More generally, there are concerns over the uncertainty that a fragile minority government might mean for investment in B.C.
“One thing that is extremely troubling about all of this is the uncertainty of it all,” said Rick Jeffery, president of the Coast Forest Products Association.
“There’s lots of populist rhetoric and things being said that is essentially putting capital on the sidelines, because capital doesn’t like uncertainty.”
And there is outright anger in Alberta over the prospects of the GreeNDP pulling out all the stops to kill the $7.4 billion expansion to the Trans Mountain pipeline.
Brad Hayes, president of the Calgary oil and gas consulting firm Petrel Robertson Consulting Ltd., said a recent column by Calgary Herald columnist Don Braid – who suggested Alberta could play hardball by cutting off the oil that currently flows through the Trans Mountain pipeline to B.C. – has been getting the thumbs-up from Albertans, especially those working in the oil and gas sectors.
In the 1970s, Alberta premier Peter Lougheed cut off the flow of oil to Eastern Canada in a spat with the Pierre Trudeau government’s national energy program.
“It’s resonating with a lot of people I’ve talked to,” Hayes said. “They’re saying, ‘Hey, remember the good old days when Peter Lougheed cut off the east when he was negotiating with Pierre Trudeau?’ Well, you know what? That’s going to be a popular idea here.
“The government’s not said anything like that, but I think there would be lots of public support for doing something kind of stupid and extreme like that. That’s the level of anger with what’s being proposed in B.C. right now.”
The GreeNDP agreement commits to raising the carbon tax by $5 per tonne per year, starting next year, and extending it to the fugitive emissions from the natural gas sector.
That is something the oil and gas industry has been prepared for anyway, both in B.C. and Alberta, so it’s not expected to be a major issue for the Alberta oil and gas companies that have been pumping billions of dollars into northeastern B.C. over the last five or six years.
“I think everyone has already got their heads around that we’re already moving toward that,” said Dan Allan, president of the Canadian Society for Unconventional Resources.
More of a concern for his members is the NDP’s pledge to assemble a scientific panel to reassess fracking in B.C. “to ensure that gas is produced safely, and that our environment is protected.”
“This idea of a review of fracking … be very cautious with that,” Muir said. “It might be that the NDP, with good intentions, wanted to say, ‘Look, we know there’s some public concerns, so our approach is we’re just going to air the issues and let people talk about it and see that there’s nothing really to be alarmed about, and if there’s anything we missed, here’s a chance to tighten it up maybe.’
“But I think when you add the Green element, they are ‘leave it in the ground.’ They’re going to have the ability to get a seat at that table. Where does that lead? Well, look at New Brunswick. They have a moratorium on natural gas now.”
When carbon tax increases, fracking studies and a new antipathy toward the Trans Mountain pipeline are all added up, it sends a warning signal to the international investment community.
“I was at a conference yesterday, where we had investors from the U.S. attending,” Allan said June 6.
“These are some of the big firms that issue private equity. And they’re saying the uncertainty of knowing that a process that Canada has – which took so much longer than they expected – could now be challenged by a new election result is very unsettling to them.”
The NDP and Greens have both spoken favourably about the mining and exploration sectors. But the industry could see some changes to the environmental assessment process.
The GreeNDP agreement talks about changing the environmental assessment process to “address failures in the professional reliance model.” That change appears to be aimed at closing the gaps that might have contributed to the Mount Polley tailings pond disaster.
Currently, mining and exploration companies are responsible for hiring engineering, geotechnical and environmental consulting firms and paying for the studies needed for environmental assessments and ongoing engineering studies.
That work used to be done by government agencies, but the BC Liberals moved it to a professional reliance model. The GreeNDP plan suggests a return to more government control.
That could work in mining companies’ favour, if they’re no longer responsible for environmental and engineering studies. But it could be bad news for all the engineering, geotechnical and environment firms in B.C. contracted to provide those studies.
“If what’s implied here is that there has to be a much larger civil service to do all this, that means that the cost of government will go up,” Muir said. “That means taxes have to go up to pay for that.
“Maybe there will be more jobs for the role of evaluating proposals, but those jobs will be in government.”
Another potential change for resource industries is land-use management. The GreeNDP agreement talks in vague terms of improving environmental standards. The NDP platform is more precise. On forestry, it calls for a move to an “evidence-based scientific approach” and an “ecosystem-based management of the Great Bear Rainforest as a model.”
Jeffery said that kind of language does not worry the coastal forest industry.
“We’re science-based, evidence-based – we’re all over that. That doesn’t scare us.”
Muir is more skeptical.
“It means that, once again, we have more bureaucracy involved – we have processes that inhibit forest planning, a major sea change in how things are done.”
